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9 Cards in this Set

  • Front
  • Back
What is an IRA? (p.715)
An Individual Retirement Account (IRA) is a tax-deferred investment and savings account that serves as a personal retirement fund for persons with earned income.
What are annual contribution limits for 2005? (p.715)
Maximum contribution is $4,000. If a married person has a non-working spouse, the limit is increased to $8,000 ($4,000 per individual account).
What is the benefit of a traditional IRA? (p.716)
Contributions to a traditional IRA are fully deductible, unless adjusted income reaches certain levels and the taxpayer participates in a qualified plan.
What are catch-up contributions? (p.716)
Additional contributions made available to individuals over 50 year old.
What are the tax benefits of a Roth IRA? (p.716)
Earnings from a Roth IRA accumulate tax free, and distributions are tax exempt.
Which type of account must begin withdrawals by age 70 1/2? (p.716)
traditional IRA
What is special about the contributions to a Roth IRA? (p.717)
Owners can distribute contributions without being subjected to income tax or penalties.
What is a SIMPLE (IRA) Plan? (p.717)
A Savings Incentive Match Plan for Employees (SIMPLE) is a tax-deferred, employer-sponsored retirement plan that more closely resembles an IRA.
At what age are distributions from an IRA no longer subject to a 10% penalty? (p.717)
59 1/2 years old